Eva-Redi
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Waiting for a Greek-Aussie Pension
The Athens News presents an outline of the bilateral agreement which is currently before parliament for ratification.
KATHY TZILIVAKIS
People already living permanently in Greece without Australian pensions will, for the first time, be able to claim an Australian pension when the agreement takes effect.
ONE YEAR has passed since Greece and Australia signed the long-awaited social security deal, but tens of thousands of Greeks have yet to benefit from the new measures.
The bilateral social security agreement is still pending ratification by the Greek parliament. But officials at the labour and social protection ministry told the Athens News they expect parliament to ratify the agreement as early as next month.
Prime Minister Costas Karamanlis sealed the deal during his official visit to Sydney on 23 May 2007, completing nearly 30 years of high-level negotiation. He had said that more than 60,000 Greek-Australians are expected to benefit immediately.
The Athens News has obtained a copy of the agreement, which is aimed at making it easier for Greeks residing in Australia and for Australians residing in Greece to claim old-age pension benefits in the other country. Here is an outline of the most important features of the agreement in question-and-answer form.
What does the agreement do?
Both countries will share responsibility and costs for the social security coverage of eligible old-age pensioners in their retirement years, according to their period of residence/insurance. The agreement will provide improved access to the old-age pension for people in Australia and Greece, allowing people who live in either country to claim their entitlement to pensions from both countries. It will also reduce costs for businesses operating in Australia and Greece (because they won't be required to pay compulsory contributions into both countries' systems when they send employees to work in the other country temporarily). The agreement only covers Greek and Australian old-age pensions.
How will the agreement help people?
The agreement will help people in Greece and Australia to satisfy the minimum qualifying residence period for an Australian pension and the minimum qualifying insurance period for a Greek pension.
Periods of residence in Australia and periods of insurance in Greece can be added together to qualify for Australian and Greek pensions.
When the agreement finally takes effect, claims for the Greek old-age pension may be lodged in Australia. Similarly, claims for Australian old-age pensions may be lodged in Greece (with the Social Insurance Institute, IKA-ETAM).
The agreement will also eliminate the need for double contributions when Australians are sent to work temporarily in Greece or when Greek employees are sent to work temporarily in Australia. The agreement does not cover healthcare and makes no changes to medical insurance coverage in either country.
What does it mean for someone who has worked in both countries?
Upon reaching the pension age, people who have lived and worked in both countries may be eligible for two pensions - one from each country.
For the Australian pension, a person does not need to prove periods of work in Australia. Eligibility is based on periods of residence in Australia. A period of insurance in Greece can be added to a period of residence in Australia for the purpose of qualifying for a pension from either, or both, countries.
How is the Australian pension worked out for permanent residents of Greece?
The agreement offers all Australian residents who return to live permanently in Greece after the agreement takes effect, the same formula for calculating their pension as applies to most of Australia's other agreements and its portability laws. It will be based on their working life residence in Australia over a denominator of 25 years.
People already living permanently in Greece without Australian pensions when the agreement starts will, for the first time, be able to claim an Australian pension. It will be based on the proportion of their total working life (for this purpose considered to be 44 years) that was spent in Australia.
The question of whether a person is a resident of Australia at a particular time is decided on the basis of a person's circumstances.
Why are there two different calculations for permanent residents of Greece?
Australia's social security system is a non-contributory system, which does not require a person to have worked or paid taxes in Australia. It is based on the concepts of residence and need and is paid out of general revenue/taxes. The formula for calculating Australian pensions was discussed for many years and formally accepted by the Greek government in 2005.
How will my Greek pension affect my Australian pension?
Australian old-age pensions are subject to income and assets tests, whether you live in Australia or another country. You must tell the Australian authorities about all income you receive from sources in Australia or any other country and about assets you hold in any country.
If you have a partner, you must also tell Australian authorities about your partner's income and assets.
If your Greek pension and any other income you have is less than the "free area" (currently 3,432 Australian dollars or 2,031 euros per annum for single pensioners and 6,032 Australian dollars or 3,571 euros per annum combined for couples), your Australian pension will not be affected.
Amounts over this will reduce the Australian pension by 40 cents (or 20 cents for each member of a couple) for each dollar of income (including Greek old-age pension).
Australia has a 10-year qualifying period of residence for an old-age pension. A person who lives in Australia with less than 10 years of Australian residence may qualify for an Australian pension after the agreement starts by adding periods of insurance in Greece.
However, until these people have lived in Australia for 10 years, one dollar will be deducted from their Australian pension for each dollar of Greek pension received.
How many people are expected to benefit from the agreement?
Approximately 60,000 people living in Australia and Greece are expected to claim an old-age pension from either, or both, countries after the agreement commences. More people will benefit over time as there are around 125,000 Greek-born residents of Australia and other Australians are increasingly spending part of their working lives overseas.
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Fast facts
Greece is bound by bilateral social insurance agreements with 14 countries outside the European Union: Argentina (since 1998), Brazil (1988), Canada (1983 - including the City of Quebec, which has its own, separate pension scheme), Cyprus (1991), Egypt (1986), Libya (1991), New Zealand (1994), Poland (1986), Romania (1997), Switzerland (1975), Syria (2001), the United States (1994), Uruguay (1997) and Venezuela (1995).
Similar bilateral agreements will soon be ratified with Chile, Ireland, Morocco, the United Kingdom and Tunisia, while agreements with Russia and the Philippines are on the table.
In the meantime, an EU regulation coordinates systems in all member states. European Council regulation 1408/71 coordinates the national social insurance legislation of EU member states. Council regulation 574/72 lays down the framework for the implementation of the above regulation.
The 1408/71 regulation was passed by the European Council in June 1971. It ensures that people moving within the EU do not lose their social security rights, including healthcare coverage and social security contributions. Under EU law, periods of social insurance cover in different countries are added together to allow you to acquire and keep rights to benefits and pensions and also to calculate the amounts of these benefits and/or pensions. This means that periods of time you have spent living with social insurance cover in one country can be taken into account, if needed, to determine your entitlement to benefits in another country, provided the national rules permit this. The advantage of this system is that even if you have lived and/or worked in more than one country, you will not lose any periods of cover or contributions.
* For more information, visit the European Commission's special website (http://ec.europa.eu/eulisses)
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Greek migration to Australia
Greek migration to Australia dates back to 1827. The majority of Greeks, however, made the long journey after World War II. Some 240,000 Greek-born settlers were registered by Australian authorities between 1945 and 1982.
Since the 1950s, the Greeks in Australia have been and continue to be the second largest immigrant population, after the Italian. Some 67,000 Greeks went to Australia to live and work during the period 1965-69, making up 9.3 percent of the immigrants there. Between 1975 and 1979, an additional 10,500 Greeks embarked on the long journey. Over the past 40 years, the size of the Greek community in Australia has steadily risen with the number of second- and third-generation Greeks adding another 30 percent.
ATHENS NEWS , 02/05/2008, page: A13
source: http://www.athensnews.gr/athweb/nathens.prnt_article?e=C&f=13285&t=11&m=A13&aa=1
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